Tesla and SpaceX shares fell in premarket trading on Wednesday after Democrats won big in the midterm elections, including in Texas. Investors are weighing whether state-level data center restrictions could delay projects, while AI stocks moved in mixed directions.
Shares of Tesla and SpaceX fell in premarket trading Wednesday as Democrats won a significant victory in the midterm elections. SpaceX was last trading down 4.6% and Tesla dropped 4.4%, amid big losses for Republican candidates Elon Musk had backed.
Musk spent a record of at least $474 million on the midterms and funneled $224 million into Texas alone. There, Republican Senate nominee Ken Paxton and Gov. Greg Abbott lost to Democrats.
Texas result puts data center plans in question
Democrat Gina Hinojosa is the projected winner over Abbott, according to the Associated Press. She has been outspoken in her support of a moratorium on AI data centers, and Wells Fargo estimates 27% of planned data center gigawatts are in Texas.
Dan Ives, partner at Yorkville Ives & Co., said in a note that the midterms will slow the pace of data center buildouts across the U.S. He added that the Texas election was the biggest worry of the night for tech investors.
Musk said in a post on X: "Data centers in space looking pretty appealing right now."
AI stocks move in different directions
The more direct AI plays were mixed. CoreWeave and Iren fell 0.8% and 1.9%, respectively, while Nebius Group rose 2.9% and Oracle shed 1.3%.
Nvidia, Alphabet, Meta and Microsoft were all up around 1-2%, with Amazon rising 2.7%. AMD shares rose 6.3% after announcing earnings on Tuesday.
The Democratic win adds to existing pressure on the AI trade. The Nasdaq-100 index fell into correction territory to end October on concerns that growth in data center spending was slowing.
Source: CNBC
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